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Thursday, August 11, 2011

DOE Advisors Issue Recommendations For Fracking Of Shale Gas

Aug 11: A diverse group of advisors to Department of Energy (DOE) Secretary Steven Chu released a series of consensus-based recommendations calling for increased measurement, public disclosure and a commitment to continuous improvement in the development and environmental management of shale gas, which has rapidly grown to nearly 30 percent of natural gas production in the United States [See WIMS 5/6/11]. The draft report indicates that increased transparency and a focus on best practices "benefits all parties in shale gas production: regulators will have more complete and accurate information, industry will achieve more efficient operations and the public will see continuous, measurable, improvement in shale gas activities."

The report calls for industry leadership in improving environmental performance, underpinned by strong regulations and rigorous enforcement, evolving to meet the identified challenges. The Shale Gas Production Subcommittee Chairman John Deutch, an MIT professor said, "As shale gas grows and becomes an increasingly important part of our nation's energy supply, it is crucial to bring a better understanding of the environmental impacts -- both current and potential -- and ensure that they are properly addressed. The current output of shale gas and its potential for future growth emphasize the need to assure that this supply is produced in an environmentally sound fashion, and in a way that meets the needs of public trust. Better data will help the industry focus its investments, give the public the information it needs to effectively engage, and help regulators identify and address the most important problems," Deutch continued. "We're issuing a call for industry action, but we are not leaving it to industry alone."

On August 15, 2011, the full Secretary of Energy Advisory Board (SEAB) will convene a public meeting via conference call to discuss the draft report. Members of the public may submit comments on the draft report at any time, but comments must be submitted by noon on August 15, 2011, in order to be considered at this stage. Comments received after August 15, will be considered before the Subcommittee's final report is issued, which is scheduled for November 18, 2011. The Natural Gas Subcommittee met for the first time on May 18, 2011. Subsequently, it conducted public meetings on June 1-2, June 13, June 28, and July 13, to gather information and discuss issues surrounding hydraulic fracturing. As of July 15, 2011, DOE had received over 25,000 public comments.

The Subcommittee was tasked with producing a report on the immediate steps that can be taken to improve the safety and environmental performance of shale gas development. The report reflects three months of deliberations among a diverse group of industry experts, environmental advocates, academics and former state regulators. The report includes recommendations in four key areas:

1. Making information about shale gas production operations more accessible to the public

The report calls for the full disclosure of all chemicals used in fracturing fluids. While the committee agrees with the prevailing view that the risk of leakage of fracturing fluids through fractures made in deep shale reserves is remote where there are is large separation from drinking water, the report finds that there is no economic or technical reason to prevent public disclosure of all chemicals used in fracturing fluids. It also calls for the creation of a national database of all public information made about shale gas. Assembling the data, which are currently dispersed in perhaps a hundred different locations, in a comparable format would permit easier access by all interested parties. The report recommends government funding support for existing, multi-stakeholder mechanisms such as the non-profit Ground Water Protection Council's Risk Based Data Management System and the State Review of Oil and Natural Gas Environmental Regulation.

2. Immediate and longer-term actions to reduce environmental and safety risks of shale gas operations, with a particular focus on protecting air and water quality

Air Quality: The report says that measures should be taken to reduce emissions on air pollutants, ozone precursors and methane as quickly as practicable and supports prompt adoption of standards to reduce emissions of all air contaminants. The subcommittee recommends the design and rapid implementation of measurement systems to collect comprehensive methane and other air emissions data from shale gas operations. The subcommittee also recommends that a federal interagency planning effort be launched immediately to acquire data and analyze the overall greenhouse gas footprint of shale gas operations throughout the lifecycle of natural gas use in comparison to other fuels.

Water Quality: The report urges the adoption of a systemic approach to water management based on consistent measurement and public disclosure. Companies should measure and publicly report the composition of water stocks and flow throughout the process; manifest all transfers of water among different locations; and makes recommendations about best practices in well development and construction, especially casing and cementing. Likewise, agencies should review and modernize their rules to ensure they are fully protective of both groundwater and surface water. The findings also recommend additional field studies on methane leakage from hydrofractured wells to water reservoirs and the adoption of requirements for background water quality measurements to record existing methane levels in nearby water wells prior to drilling.

A more systemic approach by the shale gas industry based on best practices -- recognized as improvements to techniques and methods over time based on measurement and field experience -- is an important way to achieve better operational and environmental outcomes. The report envisions the creation of a national organization, with external stakeholders, dedicated to continuous improvement of best practice through the development and diffusion of standards and the assessment of member compliance. The organization would likely work through regional subgroups.

4. Research and development (R&D) to improve safety and environmental performance

The report finds that, while the majority of shale gas R&D will be performed by the oil and gas industry, there is a role for the Federal government. The report recommends that the administration set an appropriate mission for shale gas R&D and level funding, with a particular focus on efficiency of water use and other improvements to enhance environmental objectives. Deutch said, "We are mindful of the nation's financial constraints. But we do see a key role that can be played by modest government support for R&D around environmental questions."

Access a release from DOE (click here). Access the complete 41-page 90-day draft report (click here). Access the SEAB website for extensive information including details on commenting, the Aug. 15 meeting, details of previous meetings, and a summary of comments (click here). Access a 5/5/11 release from DOE with additional background information on the committee members (click here). Access the complete 3-page charge to the group (click here). [*Energy/Frack]